<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1999
Commission File Number 1-15087
I.D. SYSTEMS, INC.
(Exact Name of Small business Issuer as Specified in its Charter)
Delaware 22-3270799
(State of Other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification Number)
90 William Street, Suite 402, New York, New York, 10038
(Address of principal executive offices)
(Zip Code)
(212) 677-3800
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days, Yes X No
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date: 5,714,375 shares of $.01 par
value common stock as of October 25, 1999.
<PAGE>
I.D. SYSTEMS, INC.
Table Of Contents
Part I. Financial Information
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1.
Condensed Financial Statements
Condensed balance sheets as of December 31, 1998 and September 30, 1999 (unaudited) 2
Condensed statements of operations (unaudited) for the three months and nine
months ended September 30, 1998 and 1999 3
Condensed statements of cash flows (unaudited) for the nine months ended September 30, 1998 and
1999 4
Notes to condensed financial statements 5
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations 6
Part II. Other Information
Item 6.
Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
<PAGE>
I.D. SYSTEMS, INC.
Condensed Balance Sheets
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
--------------- ------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 1,130,000 $ 14,343,000
Accounts receivable 741,000 1,101,000
Due from stockholders 23,000
Deferred taxes 67,000 67,000
Prepaid expenses and other current assets 21,000 105,000
--------------- -------------
Total current assets 1,982,000 15,616,000
Fixed assets - net 117,000 182,000
Other assets 3,000 102,000
--------------- -------------
$ 2,102,000 $ 15,900,000
--------------- -------------
--------------- -------------
LIABILITIES
Accounts payable and accrued expenses $ 329,000 $ 795,000
Capital lease obligations 10,000 6,000
Deferred revenue 545,000
--------------- -------------
Total current liabilities 884,000 801,000
Capital lease obligations 16,000 12,000
Deferred rent 38,000 41,000
Notes payable - stockholders, less unamortized debt discount of
$44,000 156,000
--------------- -------------
1,094,000 854,000
--------------- -------------
STOCKHOLDERS' EQUITY
Common stock; authorized 15,000,000 shares, $.01 par value; issued and
outstanding 3,414,000 shares and 5,714,000 shares, respectively 34,000 57,000
Additional paid-in capital 1,653,000 15,551,000
Accumulated deficit (679,000) (562,000)
--------------- -------------
1,008,000 15,046,000
--------------- -------------
$ 2,102,000 $ 15,900,000
--------------- -------------
--------------- -------------
</TABLE>
See notes to financial statements 2
<PAGE>
I.D. SYSTEMS, INC.
Condensed Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ -----------------------------
1998 1999 1998 1999
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Revenues $ 861,000 $ 1,704,000 $ 1,784,000 $ 4,213,000
Cost of revenues 382,000 914,000 667,000 2,517,000
------------ ------------- ------------ -------------
Gross profit 479,000 790,000 1,117,000 1,696,000
Selling, general and administrative expenses 233,000 656,000 654,000 1,467,000
Research and development expenses 31,000 93,000 55,000 149,000
------------ ------------- ------------ -------------
Income from operations 215,000 41,000 408,000 80,000
Interest income 6,000 148,000 14,000 176,000
Interest expense (8,000) (18,000) (25,000) (53,000)
------------ ------------- ------------ -------------
Income before taxes 213,000 171,000 397,000 203,000
Income tax provision 19,000 71,000 35,000 86,000
------------ ------------- ------------ -------------
Net income - historical $ 194,000 $ 100,000 $ 362,000 $ 117,000
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
Historical net income per share - basic and diluted
Net income - historical $ 194,000 $ 100,000 $ 362,000 $ 117,000
Pro forma income taxes 79,000 147,000
------------ ------------- ------------ -------------
Pro forma net income $ 115,000 $ 100,000 $ 215,000 $ 117,000
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
Pro forma net income per share - basic $.03 $.02 $.06 $.03
---- ---- ---- ----
---- ---- ---- ----
Pro forma net income per share - diluted $.03 $.02 $.06 $.02
---- ---- ---- ----
---- ---- ---- ----
Weighted average common shares outstanding -
basic income per share 3,414,000 5,600,000 3,414,000 4,150,000
Effect of potential common shares from exercise of
options 112,000 1,049,000 112,000 1,030,000
------------ ------------- ------------ -------------
Weighted average common shares outstanding -
diluted income per share 3,526,000 6,649,000 3,526,000 5,180,000
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
See notes to financial statements 3
<PAGE>
I.D. SYSTEMS, INC.
Condensed Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------
1998 1999
------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 362,000 $ 117,000
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 25,000 36,000
Amortization of debt discount 11,000 44,000
Deferred taxes 35,000
Deferred rent expense 29,000 3,000
Deferred revenue 90,000 (545,000)
Changes in:
Accounts receivable (610,000) (360,000)
Inventory 33,000
Prepaid expenses and other assets (186,000)
Accounts payable and accrued expenses 69,000 466,000
------------- --------------
Net cash provided by (used in) operating activities 44,000 (425,000)
------------- --------------
Cash flows from investing activities:
Purchase of fixed assets (62,000) (98,000)
------------- --------------
Cash flows from financing activities:
Payment of lease obligations (5,000) (8,000)
Receipt of amount due from stockholders 23,000
Payment of notes payable - stockholders (200,000)
Proceeds from initial public offering - net 13,921,000
------------- --------------
Net cash (used in) provided by financing activities (5,000) 13,736,000
------------- --------------
Net (decrease) increase in cash and cash equivalents (23,000) 13,213,000
Cash and cash equivalents - beginning of period 406,000 1,130,000
------------- --------------
Cash and cash equivalents - end of period $ 383,000 $ 14,343,000
------------- --------------
------------- --------------
</TABLE>
See notes to financial statements 4
<PAGE>
I.D. SYSTEMS, INC.
Notes to Condensed Financial Statements
September 30, 1999
NOTE A - BASIS OF REPORTING
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such statements include all adjustments (consisting only of normal
recurring items) which are considered necessary for a fair presentation of the
financial position of I.D. Systems, Inc. (the "Company") as of September 30,
1999, the results of its operations for the three-month and nine-month periods
ended September 30, 1998 and 1999 and cash flows for the nine-month periods
ended September 30, 1998 and 1999. The results of operations for the nine-month
and three-month periods ended September 30, 1999 are not necessarily indicative
of the operating results for the full year. It is suggested that these financial
statements be read in conjunction with the financial statements and related
disclosures for the year ended December 31, 1998 included in the Prospectus of
I.D. Systems, Inc. dated June 30, 1999.
NOTE B - NET INCOME PER SHARE OF COMMON STOCK
Basic income per share is based on the weighted average number of common shares
outstanding during each period. Diluted income per share reflects the potential
dilution assuming common shares were issued upon the exercise of outstanding
options and warrants and the proceeds thereof were used to purchase outstanding
common shares.
NOTE C - CONCENTRATION OF CUSTOMERS
One customer accounted for approximately 98% and 73% of the Company's revenues
during the three-month periods ended September 30, 1998 and 1999, respectively.
The same customer accounted for approximately 98% and 85% of the Company's
revenues during the nine-month periods ended September 30, 1998 and 1999,
respectively.
NOTE D - INCOME TAXES
Beginning January 1, 1999, the Company became subject to federal and state
income taxes as a C corporation. Prior to January 1, 1999 the Company was an S
corporation for federal and state tax purposes and was only subject to local
taxes. Pro forma net income in the accompanying statements of operations include
pro-forma adjustments for federal and state income taxes which would have been
recognized had the S corporation election not been in effect.
NOTE E - INITIAL PUBLIC OFFERING
The Company issued and sold 2,300,000 shares of its common stock at $7.00 per
share in an initial public offering. The offering provided net proceeds to the
Company of approximately $13,921,000.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of
operations of I.D. Systems should be read in conjunction with I.D. Systems'
financial statements and notes thereto appearing elsewhere herein.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve a number of risks
and uncertainties. The following are among the factors that could cause actual
results to differ materially from the forward-looking statements: business
conditions and growth in the wireless tracking industries; general economic
conditions, lower than expected customer orders or variations in customer order
patterns; competitive factors, including increased competition, changes in
product and service mix; and resource constraints encountered in developing new
products. The forward-looking statements contained in the MD&A regarding
industry trends, product development and liquidity and future business
activities should be considered in light of these factors.
We were incorporated in August 1993 and began to derive revenues from our
initial line of products in March 1995. Revenues are generated from design and
engineering fees as well as sales of our system. Our revenues relate to the time
expended and expertise involved in customizing our system to the needs of each
individual customer and related material costs. In the future, we intend to
generate additional revenues by selling software and hardware upgrades as well
as on-going maintenance and support contracts to our existing customers. We
anticipate that a greater portion of future revenues will be comprised of sales
of our system.
Our initial contract was entered into with the U.S. Postal Service to develop
and install a pilot system in approximately 40 postal facilities in the
Washington D.C. metropolitan area. In 1997, we entered into a $6.7 million
follow-on agreement with the U.S. Postal Service which provides for the wireless
monitoring and tracking of mail in approximately 300 postal facilities. During
September 1999 we received an $875,000 increase to that agreement. During 1999,
we entered into contracts with Federal Express Corporation, Ford Motor Co.,
Hallmark Cards, Dana Commercial Credit Corporation and other companies for
integrated tracking and monitoring systems for forklift trucks and other similar
vehicles. We also entered into an agreement with Avis Rent A Car System, Inc.
"Avis", which provides for the pilot sale of a system which automates the car
rental and return process. The pilot program was completed on July 31, 1999 and
Avis is currently evaluating the results of the pilot program.
Results of Operations
The following table sets forth, for the periods indicated, certain operating
information expressed as a percentage of revenue:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1998 1999 1998 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 44.4 53.6 37.4 59.7
--------- --------- --------- ---------
Gross profit 55.6 46.4 62.6 40.3
Selling, general and administrative expenses 27.1 38.5 36.6 34.8
Research and development expenses 3.6 5.5 3.1 3.5
--------- --------- --------- ---------
Income from operations 24.9 2.4 22.9 2.0
Net interest (expense) income (0.1) 7.6 (0.6) 2.9
--------- --------- --------- ---------
Income before income tax provision 24.8 10.0 22.3 4.9
Income tax expense 2.2 4.1 2.0 2.1
--------- --------- --------- ---------
Net income - historical 22.6 5.9 20.3 2.8
Pro forma income taxes 9.2 - 8.2 -
--------- --------- --------- ---------
Net income 13.4% 5.9% 12.1% 2.8%
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
6
<PAGE>
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1998
REVENUES. Revenues increased 98% to $1,704,000 in the three months ended
September 30, 1999 from $861,000 in the three months ended September 30, 1998.
This increase was attributable to an increase in the amount of work performed
by us under our contracts with the U.S. Postal Service, Federal Express
Corporation, Ford Motor Co., Avis Rent A Car System, Inc. and Hallmark Cards.
COST OF REVENUES. Cost of revenues increased to $914,000 in the three months
ended September 30, 1999 from $382,000 in the three months ended September 30,
1998. As a percentage of revenues, cost of revenues increased to 53.6% in the
three months ended September 30, 1999 from 44.4% in the three months ended
September 30, 1998. This increase was primarily attributable to an increase in
the portion of revenues under the United States Postal Service contract
attributable to materials in the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998, which under this contract
have lower margins than revenues related to labor. Gross profit increased to
$790,000 in the three months ended September 30, 1999 from $479,000 in the three
months ended September 30, 1998. As a percentage of revenues, gross profit
decreased to 46.4% in the three months ended September 30, 1999 from 55.6% in
the three months ended September 30, 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to $656,000 in the three months ended
September 30, 1999 from $233,000 in the three months ended September 30, 1998.
The increase was attributable to an increase in salaries and recruiting fees
resulting from an increase in personnel hired to accommodate our growth. As a
percentage of revenues, selling, general and administrative expenses increased
to 38.5% in the three months ended September 30, 1999 from 27.1% in the three
months ended September 30, 1998.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
to $93,000 in the three months ended September 30, 1999 from $31,000 in the
three months ended September 30, 1998. This increase was attributable to
increased research and development costs related to developing new applications
for our products. As a percentage of revenues, research and development expenses
increased to 5.5% in the three months ended September 30, 1999 from 3.6% in the
three months ended September 30, 1998.
NET INTEREST (EXPENSE) INCOME. Interest income was $148,000 in the three months
ended September 30, 1999 as compared to $6,000 in the three months ended
September 30, 1998. This increase was attributable to larger average cash
balances in 1999 as compared to 1998 as we received the proceeds from our
initial public offering in July and August of 1999.
Interest expense was $18,000 in the three months ended September 30, 1999 as
compared to $8,000 in the three months ended September 30, 1998. This increase
is attributable to accelerated amortization of the debt discount due to the
repayment of stockholder loans.
INCOME TAXES. Income tax expense was $71,000 in the three months ended September
30, 1999 as compared to $19,000 in the three months ended September 30, 1998.
Beginning January 1, 1999, we became subject to federal and state income taxes
as a C corporation. Prior to January 1, 1999 we were an S corporation for
federal and state tax purposes and were only subject to local taxes. Pro forma
net income for the three months ended September 30, 1998 reflects $79,000 of
federal and state income taxes which would have been recognized had the
S corporation election not been in effect.
NET INCOME. Net income was $100,000 in the three months ended September 30, 1999
as compared to pro forma net income of $115,000 in the three month period
ended September 30, 1998. This decrease was due primarily to the reasons
described above.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998
REVENUES. Revenues increased 136% to $4,213,000 in the nine months ended
September 30, 1999 from $1,784,000 in the nine months ended September 30, 1998.
This increase was attributable to an increase in the amount of work that was
performed by us under our contracts with the United States Postal Service,
Federal Express Corporation, Ford Motor Co., Avis Rent A Car Systems, Inc.
and Hallmark Cards.
COST OF REVENUES. Cost of revenues increased to $2,517,000 in the nine months
ended September 30, 1999 from $667,000 in the nine months ended September 30,
1998. As a percentage of revenues, cost of revenues increased to 59.7% in the
7
<PAGE>
nine months ended September 30, 1999 from 37.4% in the nine months ended
September 30, 1998. This increase was primarily attributable to an increase
in the portion of revenues under the United States Postal Service contract
attributable to materials in the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998 which under this
contract have lower margins than revenues related to labor. Gross profit
increased to $1,696,000 in the nine months ended September 30, 1999 from
$1,117,000 in the nine months ended September 30, 1998. As a percentage of
revenues, gross profit decreased to 40.3% in the nine months ended September
30, 1999 from 62.6% in the nine months ended September 30, 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to $1,467,000 in the nine months ended
September 30, 1999 from $654,000 in the nine months ended September 30, 1998.
This increase is principally due to the growth in our operations, including an
increase in salaries and recruiting fees resulting from an increase in personnel
hired during the year to accommodate our growth. As a percentage of revenues,
selling, general and administrative expenses decreased from 36.6% in the nine
months ended September 30, 1998 to 34.8% in the nine months ended September 30,
1999.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
to $149,000 in the nine months ended September 30, 1999 from $55,000 in the nine
months ended September 30, 1998. This increase was attributable to increased
research and development costs related to developing new applications for our
products. As a percentage of revenues, research and development expenses
increased to 3.5% in the nine months ended September 30, 1999 from 3.1% during
the nine months ended September 30, 1998.
NET INTEREST (EXPENSE) INCOME. Interest income was $176,000 in the nine months
ended September 30, 1999 as compared to $14,000 in the nine months ended
September 30, 1998. This increase was attributable to larger average cash
balances in 1999 as compared to 1998 as we received the proceeds from our
initial public offering in July and August of 1999.
Interest expense was $53,000 in the nine months ended September 30, 1999 as
compared to $25,000 in the nine months ended September 30, 1998. This increase
is attributable to accelerated amortization of the debt discount due to the
repayment of stockholder loans.
INCOME TAXES. Income tax expense was $86,000 in the nine months ended September
30, 1999 as compared to $35,000 in the nine months ended September 30, 1998.
Beginning January 1, 1999 we became subject to federal and state income taxes as
a C corporation. Prior to January 1, 1999 we were an S corporation for federal
and state tax purposes and we were only subject to local taxes. Pro forma net
income for the nine-months ended September 30, 1998 reflects $147,000 of federal
and state income taxes which would have been recognized had the S corporation
election not been in effect.
NET INCOME. Net income decreased to $117,000 in the nine months ended September
30, 1999 from pro forma net income of $215,000 in the nine months ended
September 30, 1998. This decrease was due primarily to the reasons described
above.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, we had $14,343,000 of cash and cash equivalents and
$14,815,000 of working capital as compared to $1,130,000 and $1,098,000,
respectively at December 31, 1998.
Net cash used in operating activities was $425,000 for the nine months ended
September 30, 1999 as compared to net cash provided by operating activities of
$44,000 for the nine months ended September 30, 1998. Net cash used in operating
activities in the nine months ended September 30, 1999 was primarily due to an
increase in accounts receivable of $360,000, an increase in prepaid expenses and
other assets of $186,000 and a decrease in deferred revenue of $545,000,
partially offset by an increase in accounts payable and accrued expenses of
$466,000 and net income of $117,000. Net cash provided by operating activities
for the nine months ended September 30, 1998 was from net income of $362,000 and
various adjustments to reconcile net income to net cash provided operating
activities, partially offset by an increase in accounts receivable of $610,000.
Cash used in investing activities in the nine months ended September 30, 1999
was $98,000 as compared to $62,000 in the nine months ended September 30, 1998.
The use of cash reflected capital expenditures for fixed assets.
8
<PAGE>
Net cash provided by financing activities was $13,736,000 for the nine months
ended September 30,1999 as compared to net cash used in financing activities
of $5,000 for the nine months ended September 30, 1998. Cash provided by
financing activities in the nine months ended September 30, 1999 resulted
primarily from $13,921,000 of net proceeds received from our initial public
offering in July and August of 1999 partially offset by a $200,000 repayment
of notes payable to stockholders.
The Company completed its initial public offering of its common stock, which
closed in July 1999 and August 1999 (overallotment). The offering provided net
proceeds to the Company of approximately $13,921,000 from the sale of 2,300,000
shares at $7.00 per share.
We believe our operations have not been and, in the foreseeable future, will not
be materially adversely affected by inflation or changing prices.
RECENTLY ISSUED FINANCIAL STANDARDS
We believe that recently issued financial standards will not have a significant
impact on our results of operations, financial position or cash flows.
YEAR 2000 RISK
Many currently installed computer systems and software products are coded to
accept or recognize only two digit entries in the date code field. These systems
and software products will need to accept four digit entries to distinguish 21st
century dates from 20th century dates. As a result, computer systems and/or
software used by many companies and governmental agencies may need to be
upgraded to comply with such Year 2000 requirements or risk system failure or
miscalculations causing disruptions of normal business activities.
STATE OF READINESS
We completed our assessment of the Year 2000 readiness of our products and
operating, financial and administrative systems, including the hardware and
software that comprise our system. Our assessment plan consisted of:
- assessing non-information technology such as material
hardware, software and services that are both directly and
indirectly related to the delivery of our system to our users;
- assessing information technology such as operating, financial
and administrative systems;
- assessing repair or replacement requirements;
- implementing repair or replacement; and
- creating contingency plans in the event of Year 2000 failures.
We have tested the software systems which we have developed or are developing
and which we market and we have determined that such software is year 2000
compliant. Our "information technology systems", such as accounting,
financial and administrative software is supplied by various third parties
and could be easily replaced if necessary. We have received certification and
in some cases also tested such software and determined that it is also year
2000 compliant. We use various third party contractors to supply our various
needs for materials and services. We believe that there are numerous
alternate suppliers for all the materials and services which we purchase from
third parties. Accordingly we do not consider any particular third party
relationship to be material to our operations. We have, however, received
certification from our third party suppliers that they are year 2000
compliant.
9
<PAGE>
COSTS
To date, we have incurred immaterial costs on Year 2000 compliance issues.
Most of our expenses are related to the operating costs associated with time
spent by employees in the evaluation process and Year 2000 compliance matters
generally. We anticipate that these expenses shall continue to be immaterial.
Such expenses, if higher than anticipated, could have a material adverse
effect on our business, results of operations and financial condition.
RISKS
We are not currently aware of any Year 2000 compliance problems relating to our
system that would have a material adverse effect on our business, results of
operations and financial condition. There can be no assurance that third-party
software, hardware or services on which our system will operate will not need to
be revised or replaced, all of which could be time-consuming and expensive. Our
failure to fix or replace our internally developed propriety software or
third-party software, hardware or services on a timely basis could, in the worst
case scenario, result in lost revenues, increased operating costs or the loss of
customers and other business interruptions, such as delays in delivering
products to our customers due to our sub-contractors' delay in supplying us with
components, any of which could have a material adverse effect on our business,
financial condition and results of operations. Moreover, the failure of our
customers to fix or replace their software or hardware on a timely basis could
result in an indirect adverse effect on our business, financial condition and
results of operation.
In addition, there can be no assurance that governmental agencies,
utility companies, third-party service providers and others outside of our
control will be Year 2000 compliant. The failure by such entities to be Year
2000 compliant could result in a systematic failure beyond our control such as a
transportation systems, telecommunications or electrical failure, which could
also prevent us from delivering our system to our customers or decrease the
commercial activity of our customers, which could have a material adverse effect
on our business, financial condition and results of operations.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
I.D. SYSTEMS, INC.
DATED: October 25, 1999 By: /s/ Kenneth S. Ehrman
---------------------------------------
Kenneth S. Ehrman
President(Principal Executive Officer)
DATED: October 25, 1999 By: /s/ Ned Mavrommatis
---------------------------------------
Ned Mavrommatis
Chief Financial Officer(Principal
Accounting Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 14,343,000
<SECURITIES> 0
<RECEIVABLES> 1,101,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,616,000
<PP&E> 286,000
<DEPRECIATION> 104,000
<TOTAL-ASSETS> 15,900,000
<CURRENT-LIABILITIES> 801,000
<BONDS> 0
0
0
<COMMON> 57,000
<OTHER-SE> 14,989,000
<TOTAL-LIABILITY-AND-EQUITY> 15,900,000
<SALES> 4,213,000
<TOTAL-REVENUES> 4,213,000
<CGS> 2,517,000
<TOTAL-COSTS> 4,133,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,000
<INCOME-PRETAX> 203,000
<INCOME-TAX> 86,000
<INCOME-CONTINUING> 117,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,000
<EPS-BASIC> 0.03
<EPS-DILUTED> 0.02
</TABLE>
